Belgium: heat rising over cost of living

Thousands of Belgian workers will join a trade union rally in Brussels today, to defend their purchasing power.

Some 64 per cent of Belgians are afraid of not being able to pay their energy bills, according to a poll published on Monday by some of the country’s most important news networks. Faced with this surge in prices and the fear of not being able to cope financially, most Belgians say they have changed their behaviour. Nearly eight out of ten are using less electricity, gas, water or heating fuel, the poll indicates.

At current tariffs, the average Belgian family will have to pay an annual bill of €10,000 for gas and electricity. That’s ten times more than last year. These calculations by the country’s energy economists are very similar to those in neighbouring countries and indeed all over Europe.

Profits explosion

This dramatic erosion of citizens’ purchasing power stands in stark contrast to the explosion of the profits of multinational companies in Belgium, as elsewhere. Just two figures to illustrate this: Total made an extraordinary profit of €10 billion in the first of semester 2022, Engie €5 billion.

As the veteran economist Joseph Stiglitz stresses, energy companies ‘didn’t do anything to deserve’ this windfall: ‘All that is going on is a redistribution from consumers to rich fossil fuel companies.’ And with other European countries such as Spain and Italy—even the market-fundamentalist United Kingdom—having already introduced windfall taxes, Belgian unions call on their public authorities to tax, heavily and urgently, the super-profits of the energy industrial groups and other companies present in the country.

Common European action will be key, and the European Trade Union Confederation has advanced a six-point-plan, calling for price caps and reform of the European energy market, among other things. The Organisation for Economic Co-operation and Development also supports windfall taxes and the European Commission proposed last week a $140 billion tax on energy companies.

Belgian unions also advocate action during the autumn for a balanced increase in the country’s minimum social-security benefits. Without social security more than 40 per cent of Belgian citizens would live below the national poverty line. Automatic indexation helps, as for Belgian wages: social-security benefits are increased when the cost-of-living index adds 2 per cent. But even with social security and automatic indexation, not everybody reaches the threshold for a life in dignity.

That’s why targeted proposals have been made by the unions on social security and its 2023 budget. The unions’ aim is also to maintain the insurance character of social security and attention should be paid to the calculation ceilings on pensions, among other benefits.

Wage law

Unions reinforce their call on the government to repeal the wage law tightly limiting negotiated wage increases and to restore the freedom to negotiate—the motive behind earlier mobilisations. At the beginning of 2022, the Belgian unions launched a petition for the government to reform the law. More than 87,000 citizens signed it and in June 80,000 demonstrators took to the streets to make their voices heard.

These actions have borne fruit: on June 29th the Belgian parliament gave a hearing to three unions on the subject of the law on wages. Energy prices continue to soar, but the 1996 law prevents a fair increase in wages, especially in companies with high profits.

More and more Belgians are finding life becoming too expensive while wages are not increasing accordingly. This law must be changed and the possibility to negotiate freed up.